Dilapidations

As a landlord or tenant of commercial property, you need to ensure that the condition of the building you lease is maintained throughout the lease period. However, breaches of the lease can occur, either during or towards the end of the lease term, causing dilapidations. This is where a dilapidations surveyor comes in. At KEYS Consulting Ltd, we offer dilapidations surveys to assess the condition of commercial property, identify any breaches of the lease, and provide a comprehensive report on necessary repairs and maintenance. Protect your interests by taking proactive steps towards dilapidation issues with the help of our building survey expertise.

Our team of Chartered Surveyors are highly experienced in dilapidation claims and our Schedules of Dilapidations contain:

    • details of documents relied upon
    • the relevant clause of the lease or other document
    • the alleged breach
    • the remedy required

COST FOR SCHEDULE OF DILAPIDATIONS

When it comes to the dilapidations process, understanding the cost involved can be crucial. At our company, we price our Schedule of Dilapidations appropriately based on the cost of damages found. This is especially important in commercial dilapidations where the state of repair can greatly impact the potential cost. Additionally, there may be situations where interim dilapidations require costing in order to come to a fair agreement. We believe in being transparent with our pricing and ensuring that all parties involved are aware of the costs at hand.

In any such case, the Schedule of Dilapidations would be priced with due reference to reliable and appropriate cost information, which is available from our sources, for example:

  • invoices following the completion of the remedial works
  • the results of a competitive tender exercise
  • pricing book (BCIS Online)
  • relevant and recent tender price information

At our firm, we take great care in ensuring that our costs are meticulously recorded and presented in a way that can be easily comprehended by all parties involved. Whether we’re providing strategic advice to clients throughout the UK or representing them in London and the southeast, we know that the transparency of our cost breakdowns is imperative to building and maintaining trust. From the Client to the other party, their advisers, and the tribunal, we strive to provide a level of detail that allows for a full understanding of the work we’ve done and the expenses incurred. At the end of the day, our goal is to foster strong relationships and deliver the best possible outcome for our clients.

NEGOTIATION THROUGH DILAPIDATIONS

Negotiation while dealing with dilapidations can be a daunting task for both the landlord and tenant. However, with a schedule of conditions in place, it becomes easier to keep track of the property’s state. This is where a dilapidations report comes into play, outlining the landlord’s claim for the property to be restored to its original state. It’s crucial to note that negotiations regarding the Schedule of Dilapidations are not a one-sided affair. Both parties must be heard, and a settlement agreement can be achieved through open dialogue. To ensure that both parties are on the same page, we advocate for regular meetings during negotiations. Such meetings provide a platform for parties to clarify their differences and even reach an agreement on aspects of the claim. Therefore, it’s essential to engage in negotiations, understand each other’s positions, and work toward mutually beneficial solutions.

INTERIM SCHEDULE OF DILAPIDATIONS

When it comes to fulfilling lease obligations and maintaining a leasehold property, it’s crucial to consider dilapidations. At our firm, we understand this concern and take a proactive approach in helping our clients navigate such situations. Our expert team takes the time to listen to our clients, understand their unique circumstances, and provide professional advice and guidance to ensure that each party is aware of their rights and responsibilities. Our ultimate goal is to restore the property to its original state while covering the cost in a fair and reasonable manner. By doing so, we help our clients maintain positive relationships with their landlords or tenants, minimise the risk of disputes, and ensure that they are protected under the law.

Of course, there are limitations and regulations that come into play, such as the Leasehold Property (Repairs) Act 1938, which only applies to leases of seven years or more with three or more years remaining. As experts in this field, we are committed to providing reliable and thorough interim schedules of dilapidations to our clients.

The remedies available to a landlord pursuing dilapidations claim during the term can include:

  • damages (with reference to the diminution in the value)
  • forfeiture
  • specific performance (court orders) and
  • entry to carry out the work

TERMINAL SCHEDULE OF DILAPIDATIONS

When a lease agreement comes to an end, landlords often find themselves facing a complex issue: dilapidations. To address this issue, it is important to carry out a dilapidation survey at the beginning of the lease, in order to assess the property’s condition. Once the tenancy has ended, an appointed surveyor should create a Terminal Schedule of Dilapidations, detailing any breaches of the lease agreement and the resulting cost liability. As damages are the only remedy available to landlords in such situations, the assessment of dilapidations can be a crucial determinant of the amount of compensation they can claim. To make the process more transparent and helpful to all parties concerned, it is advisable to summarise the costs on a single sheet at the beginning or end of the Schedule document. This can save time and effort for both landlords and tenants and help ensure that the process is carried out in an efficient and fair manner.

Where appropriate, the following figures are typically considered when preparing the summary page of the Schedule of Dilapidations:

    • professional fees in connection with the preparation of the document
    • legal fees in connection with the service of the same
    • design and administration of the work envisaged 
    • costs associated with compliance with the CDM Regulations
    • any relevant statutory fees and
    • an allowance for irrecoverable VAT

Case Studies

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What is a pre contract dilapidation survey?

If you’re a landlord and have recently leased out a building, it’s important to carry out a pre contract dilapidations survey at the outset. This process involves a chartered building surveyor inspecting the building and carefully documenting any issues, both big and small. This survey will provide valuable information on the state of the building, allowing you to understand what repairs or restorative work needs to be carried out. It’s also a great way to ensure that maintenance contracts have been fulfilled correctly in accordance with any lease agreement. A pre contract dilapidations survey can reveal everything from minor issues, like wall brackets that need to be removed, to larger repairs, such as full wall or roof replacements. It’s truly an essential step for a professional  landlord to safeguard his position.

Who can carry out a tenants dilapidation survey?

As a commercial tenant, it’s important to be aware of your contractual obligations when it comes to the end of your lease. One of those obligations may include a covenant to leave the property in a certain condition. To assess whether any work is required to get the building up to this standard, a dilapidation survey should be carried out. Ideally, it should be a professional with experience in dilapidations protocol, who can advise on the condition of the property and the cost implications of any necessary repairs. The survey process should be done well in advance of tenants moving out of the property to allow enough time for any required work to be completed before the lease ends. Failure to do so could result in the landlord’s dilapidations claim, which is normally a substantial expense that tenants would want to avoid.

What is the function of a dilapidations survey?

A dilapidations survey is an important tool for both tenant and landlord. This survey is conducted by a surveyor who specialises in dilapidations consultancy and is usually carried out before the end of a lease agreement. The purpose of the survey is to identify any necessary repairs or alterations that need to be made to the property, in order for the tenant to fulfil their lease covenant. This survey report is then used as a reference for determining the necessary repairs and any associated costs. By having a clear understanding of the condition of the property, both the tenant and landlord can ensure that the lease agreement is fulfilled and avoid any disputes or legal issues. As a result, it is highly recommended that both tenants and landlords work with an experienced RICS-accredited dilapidations surveyor to carry out a thorough dilapidations survey.

Who is responsible for dilapidations?

When it comes to dilapidations, many people can get confused about who is responsible. Is it the landlord, the tenant, or their solicitor? Well, the answer lies in the specific terms of the lease agreement. Typically, landlords include a dilapidations clause in the lease agreement that makes it clear what is expected of the tenant in terms of maintaining the property. Should any issues arise, the landlord can make a dilapidation claim against the tenant. This is where experts in dilapidations come in – they can assess the property and determine the work required, as well as the cost. It’s important for both landlords and tenants to understand their responsibilities and consult with legal experts if necessary.